Entry costs and regional productivity disparity in an open economy

Guohua Peng

Economics Letters, 2017, vol. 161, issue C, 138-140

Abstract: This paper explores how interactions between interregional and international trade shape the effects of entry costs on cross-region productivity disparity within a country. In a two-country three-region Melitz model, compared with an autarky, regional productivity disparity in an open economy resulting from entry costs differentials widens further if interregional transportation costs are low, and shrinks when they are high.

Keywords: Entry costs; Regional disparity; Trade; Firm heterogeneity (search for similar items in EconPapers)
JEL-codes: F1 R1 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:161:y:2017:i:c:p:138-140

DOI: 10.1016/j.econlet.2017.09.033

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